LUXFLAG Green Bonds

The Label LUXFLAG Green Bond, launched in 2017, was the first label dedicated to Green Bonds in the World intent on reassuring investors that the Green Bond follows internationally recognized standards and uses its proceeds to finance green projects.

Generalities

Label	Luxflag-Green Bond
Nationality	Luxembourg - English
Management	label issued by LUXFLAG an independent Luxembourg-based non-profit rating agency
Label Type	Thematic
Website	https://www.luxflag.org/labels/green-bond/
Market	The label is aimed at Luxembourg funds and SICAVs.
Products	21 to the end of June 2022
Links to funds	https://www.luxflag.org/labels/green-bond/labelled-gbs.html
Criteria	https://www.luxflag.org/labels/green-bond/
Periodicity	24 months

Detail data

Description	The Label Green Bond, launched in 2017, is the first of its kind worldwide and aims to reassure investors that the Green Bond follows internationally recognized standards and uses its proceeds to finance green projects.
Genesis and development	The Label Green Bond, launched in 2017, is the first of its kind worldwide. According to LuxFLAG , green bonds have enormous potential to finance climate change action, and Luxembourg offers the ideal environment for this with, alongside LuxFLAG, the Luxembourg Stock Exchange listing more than 50 percent of the world's green bonds
Goals	The primary objective of the Green Bond Label is to reassure investors that the Green Bond follows internationally recognized standards and uses its proceeds to finance green projects
Promoters and administrators	The Label was created by the LUXEMBOURG FINANCE LABELLING AGENCY, an independent, international nonprofit association set up in Luxembourg in July 2006 by seven public and private founding members with the aim of promoting the responsible investment industry by assigning a recognizable label to green bond-type investment vehicles
SRI Approach	To obtain the label, funds must employ exclusionary policies on 100 percent holdings and have a clearly delineated thematic approach strategy
Mandatory Criteria	The minimum criteria to be met for obtaining the label are: having an Exclusion policy applied to 100 percent of holdings (Exclude those activities closely related to fossil fuels, coal and nuclear energy), a well-defined thematic approach strategy (The applicant must use its proceeds to invest in one of the broad categories of potential eligible green projects recognized by LuxFLAG) and applying the SDGs within its processes
Additional criteria	Only minimum requirements for access to the label are given
Allocation process	The Society applicants must verify their eligibility with Luxflag and prepare a letter of intent with a checklist of documents. The Label checks their eligibility and submitted the file to the Green Bonds Label Eligibility Committee, which gives an eligibility opinion. The Board of Directors of Luxflag decides on the awarding of the label. The process takes about 2 months. The Label lasts for one year and must be renewed.
External certification	The label certifies each individual bond with the need for review every 24 months
Focus on transparency	The fund must follow internationally recognized guidelines/standards such as the Green Bond Principles to illustrate its commitment to transparency and disclosure. It should also provide ex-ante evaluation of the selection process and income management carried out by an external auditor
Focus on periodic checks	The applicant must commit to regular (every 24 months) reporting (use of proceeds or audit report, sustainability/ESG report) and also be subject to applicable regulatory requirements in EU member states or equivalent and must be issued and on a regulated stock exchange or equivalent
Related parties	Luxflag is a 'joint initiative of the Luxembourg government, the Luxembourg Finance Promotion Association, the EIB, the industry association of fund managers (ALFI) the non-profit ADA (Microcredit) Association, the Luxembourg Banks Association and the Luxembourg Stock Exchange.

LUXFLAG Green Bonds

Generalities

Detail data

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